Tag: richard kaplan

CurAegis ceases operations

CurAegis Technologies Inc., formerly Torvec Inc., said Friday that it would discontinue operations as a result of lack of financing.

In a filing with the Securities and Exchange Commission, the Mt. Read Boulevard company said it did not have access to sufficient capital or prospects of additional financing to continue operations and meet its contractual obligations, “and is planning a complete and immediate cessation of operations.”

CurAegis previously said in its annual reports from 2016 through 2020 that there was substantial doubt as to the company’s ability to continue as a going concern. As of Sept. 30, 2020, the company reported cash on hand of $87,000, total assets of $284,000, negative working capital of $4.1 million, an accumulated deficit of $93.5 million and a stockholders’ deficiency of $14.8 million.

In addition, the filing stated that CurAegis would not be able to file its annual report for the year ended Dec. 31, 2020, nor its current and periodic reports going forward due to lack of financial and management resources.

The company was incorporated in New York in September 1996 under the name Torvec. Since its inception, the company has sought to design, develop, build and commercialize its technology portfolio, but it has not produced any significant revenue-producing operations. The company’s name was changed to CurAegis Technologies in 2016 in connection with the establishment of two business divisions.

The company’s Aegis division was engaged in the legacy power and hydraulic business. The company completed the sale of its Aegis division assets, including its hydraulic testing equipment, prototypes and other fixed assets, as well as intellectual property, including patents, trademarks and trade secrets relating to the Aegis division business in December 2020.

Agreements entered into in connection with the sale of the Aegis assets entitled the company to earn royalties subject to the successful commercialization of the Aegis assets by the buyer. The filing notes that CurAegis does not expect that any royalties will be forthcoming in the near term or that royalties will be sufficient to fund its operations or discharge its debts.

Five business days after the sale of the Aegis assets, $1.7 million in unpaid principal together with then unpaid and accrued interest and other amounts payable under the 6 percent senior convertible promissory notes issued during 2019 and 2020 became due and payable under the terms of the notes. CurAegis has not repaid the 2019 notes and does not have funds sufficient to do so, officials said in the filing. Continuing non-payment of the outstanding balances is an event of default under the terms of the 2019 notes, and will likely trigger cross-defaults under other of the company’s contractual obligations, the filing stated.

The company’s CURA (Circadian User Risk Assessment) division has been engaged in the fatigue management business and in the provision of solutions for health and fitness application developers. Last month, the CURA division’s lead developer resigned from his position with the company. Due to lack of financial resources, the company does not intend to fill the position. The CURA division is now inactive and would require significant capital and financing to commercialize its product offerings and maintain operations, the filing states.

The company’s quarterly report for the quarter ended Sept. 30, 2020, showed that CurAegis has received a request for arbitration on a total claim of $1.948 million from Ansen Corp. with respect to alleged past due payments and interest. The case (No. 01-20-0015-4394) has been referred to an arbitrator as of March 1, 2021. On Feb. 3, 2021, Emerging I Inc. dba Emerge, filed a complaint in the New York Supreme Court for the County of Monroe, seeking total damages of $108,500, plus interest, from the company for failure to pay invoices.

CurAegis has not responded to the two claims and does not anticipate it will be able to devote resources to defending these or any future claims, according to the filing.

In 2011, while serial entrepreneur Richard Kaplan was at Torvec’s helm, the company raised $6.5 million in a private placement of preferred stock, including a roughly $6.23 million investment by a group of investors led by Thomas Golisano. At one time, former Bausch & Lomb Inc. chairman and CEO Ronald Zarrella; Philip Saunders, owner of Saunders Management Co. and founder of TravelCenters of America Inc.; and Bonadio Group Managing Partner and CEO Thomas Bonadio were key members of the company’s board.

Former Rochester Institute of Technology president William Destler also had served on Torvec’s board at a time when brothers and co-founders James and Keith Gleasman were heading the company. At that time, Torvec had some 300 automotive patents and inventions, including the IsoTorque differential, the Infinitely Variable Transmission and the Full Terrain Vehicle.

Current company CEO James Donnelly did not immediately respond to a request for comment Friday afternoon.

[email protected] / 585-653-4021
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CurAegis sells Aegis hydraulic pump division

CurAegis Technologies Inc. has sold the assets of its Aegis division to Poseidon Fluid Power LLC. Financial details of the acquisition were not disclosed.

Included in the sale of the division are the patents, trademarks and other intellectual property as well as testing equipment, prototypes and other fixed assets related to the Aegis division. Officials said CurAegis will benefit from the successful commercialization of the Aegis assets via royalty payments for a period of 10 years.

“The strategic divestiture of the Aegis assets allows CurAegis Technologies Inc. to pivot our business strategy to focus our resources and efforts exclusively on delivering our innovative SaaS product, Cardian.io, to the rapidly growing mHealth market,” said CurAegis President and CEO Jim Donnelly. “We are confident that Poseidon has the right team to advance this technology and look forward to participating in that success consistent with the terms of the agreement.”

In April 2019, CurAegis officials said the company would sell its flagship Aegis pump and motor technology. In a filing with the Securities and Exchange Commission at the time, the Rochester based technology company said it had signed an agreement with investment banking firm Paramax Corp. to provide financial advice connected to the sale of the division.

CurAegis’ then-CEO Richard Kaplan noted in the filing that the company had considered licensing the Aegis pump, but following a comprehensive evaluation of the complexity of such a license, the marketplace acceptance of the relationship, the best potential return on the company’s investment and the time to revenue, the board decided it was in the company’s best interest to monetize the technology through divestiture.

The company has billed its hydraulic pump as smaller and lighter than conventional pumps and motors, more efficient, price competitive and unique in its ability to scale larger, allowing more powerful pumps and motors.

CurAegis, formerly Torvec Inc., has its roots in the automotive industry. Founded in 1996 by brothers James and Keith Gleasman and their father, Vernon Gleasman, the public company has some 300 automotive patents and inventions, including the IsoTorque differential, the Infinitely Variable Transmission and the Full Terrain Vehicle.

Several years ago, CurAegis developed the myCadian watch through its CURA division. The division offers proprietary technology and a suite of products designed to measure the decrease in a person’s alertness and to train individuals on how to improve alertness levels.

“CurAegis, and its predecessor Torvec, have a long history of innovation in specialty industrial applications in Rochester,” said Poseidon President and Managing Member Mark Redding. “Poseidon Fluid Power is excited to leverage our expertise in delivering innovative products to commercialize this platform globally while creating jobs here in Rochester, N.Y.”

Two directors stepped away from their posts at CurAegis in November, including Lance Drummond, who had been on the board for nearly two years, and Philip Saunders, a serial entrepreneur and TravelCenters of America Inc. founder, who joined the board in 2010.

SEC filings also show that in June, CurAegis engaged the services of Positive Venture Group Inc. to provide outsourced finance and related services, as well as certain onboarding services at a rate of $11,500 per month. PVG provides a broad range of accounting, finance and consulting services to growth-stage businesses.

An SEC filing shows that six weeks later, CurAegis CFO Kathleen Browne’s employment with the company was terminated. On Aug. 6, CurAegis appointed PVG CEO Jason Burke as chief financial officer.

The company has received an influx of funding in recent months. In June, Paychex Inc. founder Thomas Golisano purchased $125,000 principal amount of the CurAegis’ 6 percent 2019 Senior Convertible Promissory Notes and the corresponding shares of common stock. Golisano purchased $150,000 of the notes again in August. Since 2011, Golisano — on his own or with a team of investors — has injected millions of dollars into the company.

In November, CurAegis reported third-quarter financials that showed that as of Sept. 30 the company had cash on hand of $87,000, negative working capital of $4.1 million, an accumulated deficit of $92.87 million and a stockholders’ deficiency of $14.22 million. During the nine months ended Sept. 30, CurAegis raised $1 million in proceeds through the issuance of convertible notes and $235,000 from the PPP loan and SBA EIDL grant.

“The proceeds from these sources have been used to support the ongoing development and marketing of our core technologies and product initiatives,” the SEC filing noted.

Management estimated at the time that the company’s 2020 cash needs will run between $1.7 and $2 million, based on the cash used in operations in the previous nine months. As required, CurAegis reported “substantial doubt as to the company’s ability to continue as a going concern.”

Shares of company stock (OTC: CRGS) in the last 12 months have ranged from 3 to 15 cents. Following Monday’s announcement, shares were trading between 3 and 4 cents.

[email protected] / 585-653-4021
Follow Velvet Spicer on Twitter: @Velvet_Spicer

CurAegis plans sale of legacy hydraulic pump division

Weeks after filing an annual report showing a $6.5 million loss in 2018, CurAegis Technologies Inc. has announced it will sell its flagship Aegis pump and motor technology.

In an April 8 filing with the Securities and Exchange Commission, the Rochester based technology company said it had signed an agreement with investment banking firm Paramax Corp. to provide financial advice connected to the sale of the division.

CurAegis CEO Richard Kaplan noted in the filing that the company had considered licensing the Aegis pump, but following a comprehensive evaluation of the complexity of such a license, the marketplace acceptance of the relationship, the best potential return on the company’s investment and the time to revenue, the board decided it was in the company’s best interest to monetize the technology through divestiture.

In the company’s annual report, filed March 29, CurAegis officials said that during 2018 it had initiated discussions with a major hydraulics manufacturer to evaluate the technology. “After several productive discussions, the manufacturer and the company signed a memorandum of understanding to evaluate an investment in the AEGIS technologies.”

The filing also noted that CurAegis had invested in software, test equipment and personnel to enhance its development efforts, and had built a testing facility. Company officials said design modifications would continue.

CurAegis, formerly Torvec Inc., has its roots in the automotive industry. Founded in 1996 by brothers James and Keith Gleasman and their father, Vernon Gleasman, the public company has some 300 automotive patents and inventions, including the IsoTorque differential, the Infinitely Variable Transmission and the Full Terrain Vehicle.

In Monday’s filing, CurAegis said it will increase its efforts on the CURA technology, its proprietary technology that measures alertness and trains individuals on how to improve alertness levels. The CURA system allows users and third parties to anticipate and avert situations caused by the degradation of alertness. CURA pairs a wearable device with an app or software and may appeal to industries in which the alertness of workers is a safety concern, such as the trucking industry or safety and rescue.

In the company’s annual report, CURA revenue was $37,000, while cost of revenue was $110,000. CurAegis reported cash on hand on Dec. 31 of $53,000. The company reported an accumulated deficit of $87.15 million since its inception.

Monday’s SEC filing included a $100,000 promissory note to Kaplan, as well as a $25,000 note to former Rochester Institute of Technology President William Destler, who has been a CurAegis director for more than a decade.

In higher than usual trading Monday, company stock (OTC BB: CRGS) ranged from 12 cents to 14.9 cents. Its 52-week range was 10 cents to 49 cents.

[email protected] / 585-653-4021
Follow Velvet Spicer on Twitter: @Velvet_Spicer